WARFIGHTER FOCUSED, GLOBALLY RESPONSIVE SUPPLY CHAIN LEADERSHIP … · 2017. 5. 19. · – Supply 50% of total energy consumption from alternative sources by 2020 • AF Energy Plan

WARFIGHTER FOCUSED, GLOBALLY RESPONSIVE SUPPLY CHAIN LEADERSHIP

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DEFENSE LOGISTICS AGENCYAMERICA’S COMBAT SUPPORT LOGISTICS AGENCY

WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT

DLA EnergySupply-Chaining Alternative Aviation Fuels

Within the DoD

Frank PaneDirector, Energy Plans & Programs

DLA Energy Aug 25, 2010

DLA Energy

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Mission

Vision

Values

To Provide the Department of Defense and Other Government Agencies with Comprehensive Energy Solutions in the Most Effective and Efficient Manner Possible

Our Customers First Choice for Energy Solutions

• People• Service• Excellence• Innovation• Trust


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DLA Energy Enterprise

FY05 Net Sales 132.5M barrels $ 8.5B

FY06 Net Sales 133.9M barrels $12.7B




FY10 Estimate 129.0M barrels $15.2B

* 42 Gallons = 1 Barrel

Military Fuel FY09 Expanding Energy Solutions FY09

Petroleum Sales: All Customers

Net Sales 3.0M barrels - $202.2M

Forward Presence FY09

Co-located: 3 Service Control Points5 Geographic Regions: approx. 254 personnel

Personnel On Board FY09

Civilians 1,033Military 63

Inventory 59.6M barrels*

Storage Locations 625

Transactions 23.8M

Barrels Sold 129.0M

Fuel Cards $829M

Aerospace Energy Sales $79.6M

Foreign Military Sales FY09

National Gas Business $292M

Electricity Business $863M

Coal Contract Business $68.9M

Renewables $819K

Estimated U.P. Awards $1.2B

multi year awards


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“Now, the Pentagon isn’t seeking these alternative fuels just to protect our environment; they’re pursuing these homegrown energy sources to protect our national security. Our military leaders recognize the security imperative of increasing the use of alternative fuels, decreasing energy use, reducing our reliance on imported oil, making ourselves more energy-efficient.”

Remarks by The President on Energy Security at Andrews Air Force Base, 3/31/2010


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Army

• Army Energy Security Implementation Strategy –2009– ESG 3: Increased use of Renewable/Alternative

Energy– ESG 4: Assured Access to Sufficient Energy Supply – ESG 5: Reduced Adverse Impacts on the Environment–Established a Tactical Fuel and Energy Implementation

Plan Working Group (DLA Energy supporting)

Air Force

• Navy Energy Goals, published Oct 2009– Green Strike Group by 2012– Reduce petroleum by 50% in the commercial

vehicle fleet by 2015– Produce 50% of shore based requirements from

alternative sources by 2020 – Supply 50% of total energy consumption fromalternative sources by 2020

• AF Energy Plan 2010 – “Increase Supply” Goals– By 2016, be prepared to acquire 50% of domestic

aviation fuel via alternative blends greener than petroleum

– Increase facility renewable energy at annual targets– Increase non-petroleum-based fuel use by 10% per

annum in motor vehicle fleet

Navy

Focused Customer Change

Other

• NDAA FY10 Section 334 mandated study– Comprehensive assessment of the use of renewable

fuels as alternative fuels in aviation, maritime and ground transportation fleets


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Alternative Fuel Supply Chain “Pillars”• Must be a drop-in-replacement fuel

– Use existing transportation and distribution infrastructure– No modifications to weapons platforms

• “Competitive” price– Requires Departmental/Service definition (i.e. what is the acceptable

premium for “greenness” and/or energy security)

• Environmentally compliant with Section 526

• Complies with existing procurement statutes/regulations


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Synthetic Fuel Support

• Fischer-Tropsch (FT) contracts supporting AF platform certification (JP-8)– June 2007 – 315,000 USG – Gas-to-Liquid– June 2008 – 60,000 USG – Coal-to-Liquid– July 2008 – 335,000 USG – Coal-to-Liquid

• FT contracts supporting Navy platform certification (F-76)– Sept 2009 – 20,000 USG – Gas-to-Liquid

• Specification exists – AF seeking to certify all platforms by 2011


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Biofuel Support

• Hydrotreated Renewable Jet (HRJ)-8– Camelina & Tallow derived - 100,000 gal basic / 100,000 gal option each

• HRJ-5– Camelina derived - 40,000 gal basic / 150,000 gal option– Algae derived – 1500 gal total quantity

• HRF-76– Algae derived – 20,055 gal total quantity

• Army HRJ-8– 34,950 gal– Awarded 7/26/10.


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• Encourage commercial production of synthetic fuel – Feedstock neutral– All jet requirements in AK , WA, OR, under 50/50 blend specification

• Lessons learned from industry– Feedstock availability challenges– Credit availability challenges– Requirement size challenges

• Currently on “strategic pause”

Alaska Fischer-Tropsch Initiative


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Strategic Alliance for Alternative Aviation Fuels

RDML Kurt Kunkel and ATA President and CEO James May sign the Strategic Alliance for Alternative Aviation Fuels agreement Mar. 19, 2010.


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Air Transport Association Strategic Alliance

• Shared goal– Advancing the development & deployment of commercially viable,

environmentally friendly, alternative aviation fuel

• Joint Steering Group established to direct activities

• 3 Collaborative Teams– Contract and Finance– Environment– Deployment and Logistics


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GIFTPAC

• Green Initiative for Fuels Transition Pacific (GIFTPAC)– PACOM initiative– Displace at least 25% of the fuel used by the DoD in Hawaii with locally

produced “green” fuel– Support PACOM energy security requirements by developing organic

capability to replace 100% reliance on outside sources– DLA Energy as Acquisition Manager

• Request for Information issued– Elicit industry interest– Sharing of information

• Industry Day Sep 2010


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• RFS2 - Renewable Identification Number – Credits only apply to ground fuel, not aviation fuel

• Long Term Contracting Authority– DLA Energy-drafted legislative proposal seeks 20 years

• Specifications– Services still testing/approving platforms for Fisher-Tropsch specification – Hydrotreated renewable biomass specification tracking for 2011 approval

• EISA Section 526 compliance– Applies to Government only – causes potential market challenges– Acceptable life cycle green house gas measurement criteria/methodology

Challenges


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Potential “Enablers”Legislative Mandates

Environmental ConcernsLong-Term Vision/StrategyPetroleum Supply InstabilityFavorable Financing Climate

• When is the best time to create this industry?– Five years ago is probably a good answer– So is “today”

Bridging the Gap


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• Continued support of testing & certification efforts– Must have approved specifications to solicit

• Continued intergovernmental & private sector collaboration– DOE, USDA, DoD, FAA, ATA, CAAFI, others– Synergism required to make alternative aviation fuels a reality

• Blue-print to feasible objectives– A game of “singles” vs. home runs

Next Steps


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QUESTIONS?

Documents

WARFIGHTER FOCUSED, GLOBALLY RESPONSIVE SUPPLY CHAIN LEADERSHIP … · 2017. 5. 19. · – Supply 50% of total energy consumption from alternative sources by 2020 • AF Energy Plan